Let’s take a step back. What do we see on the bigger picture?
Early and late 2019, we saw two big bull runs after a downwards correction lasting a month.. Both bull runs lasted roughly 5 months.
What did we see in those five months? Very quickly declining buy volumes.
What did we see after there where too little buyers left? A correction downwards lasting roughly a month. This is also what we saw in February/March 2020.
The huge drop in February was enormous and went very quick. The correction upwards, went much slower. And we know: Impulse takes more price than time, correction takes more time than price. And that is what we are seeing here, ladies and gentleman.
So we have a very strong (but relatively slow compared to the drop) correction upwards, taking a lot of price(but even more time), where we see the volume is declining much faster than the strong upward moves in 2019.
We are having a holiday in many countries now, and a Friday is waiting for us. If, and I say IF, this week would close weak, we could close below the green trendline (support for long time, seems to be resistance now), below the 50 Weekly EMA (and 100 Daily EMA) and potentially below the 0.618 Fibonacci retracement level at 2935. Doesn’t that sound bearish? Given this graph?
It starts to look like a good moment for correction downwards. Let the SPX reconnect with the economy and society again, rather than being a de-correlated product of speculation. If not now, then soon.
And no, it’s not different this time.
Early and late 2019, we saw two big bull runs after a downwards correction lasting a month.. Both bull runs lasted roughly 5 months.
What did we see in those five months? Very quickly declining buy volumes.
What did we see after there where too little buyers left? A correction downwards lasting roughly a month. This is also what we saw in February/March 2020.
The huge drop in February was enormous and went very quick. The correction upwards, went much slower. And we know: Impulse takes more price than time, correction takes more time than price. And that is what we are seeing here, ladies and gentleman.
So we have a very strong (but relatively slow compared to the drop) correction upwards, taking a lot of price(but even more time), where we see the volume is declining much faster than the strong upward moves in 2019.
We are having a holiday in many countries now, and a Friday is waiting for us. If, and I say IF, this week would close weak, we could close below the green trendline (support for long time, seems to be resistance now), below the 50 Weekly EMA (and 100 Daily EMA) and potentially below the 0.618 Fibonacci retracement level at 2935. Doesn’t that sound bearish? Given this graph?
It starts to look like a good moment for correction downwards. Let the SPX reconnect with the economy and society again, rather than being a de-correlated product of speculation. If not now, then soon.
And no, it’s not different this time.